The Tanzanian government has concluded that it will now allow foreign investors from within the EAC to buy shares in local companies.
The offer so far only applies to telecommunications companies, and only those listed on the Dar es Salaam stock exchange.
This came after a stall in the IPO of the nation’s largest mobile operator.
A statement from the Capital Markets and Securities Authority (CMSA) stated that “The restrictions on participation of non-Tanzanian investors in the IPOs of the telecommunication companies have been removed following the amendments of the Electronic and Postal Communication Act (EPOCA) 2010 by the Finance Bill 2017…”
The plan is still in its initial phases and requires the green light from parliament. Tanzania previously had a ban in place that locked out would-be foreign investors from trading in telecoms at the exchange.
This lifting of restrictions spells good news for Vodacom which had, at one point, put up 25 percent of its shares for an initial public offering to raise funds.
Vodacom responded to this spanner in the works by extending its offer by three weeks.
The company was looking to raise $213 million by selling off 560 million shares. The IPO stirred generated quite a bit of attention within the institutional and retail investor community.
The lifting of the ban is a reversal of a 2016 enactment of the EPOCA law that made it mandatory to telecoms companies to sell of a fourth of their shares on the Dar es Salaam stock exchange. This was in a bid to boost local ownership.
